Strong Dollar Pushes Gold Prices Down Nearly 1% in India
Gold prices in India dropped nearly 1% on Monday, falling to Rs 1.49 lakh per 10 grams in futures trading. The decline was driven by a stronger US dollar, which put pressure on bullion's recovery. On the Multi Commodity Exchange (MCX), December delivery gold fell by Rs 1,020, or nearly 1%, to Rs 1,49,370 per 10 grams. The metal had already lost Rs 2,887, or 2%, in the previous week.
Kaveri More, Commodity Technical Analyst at Choice Broking, noted that gold has been stuck in a consolidating phase due to a stronger US dollar and higher bond yields. The dollar index hovered near an 18-month high of 102.37, adding to the downward pressure on gold. Globally, Comex gold futures for December delivery rose slightly to USD 4,163.50 per ounce in New York.
Akshat Siddhant, Lead Quant Analyst at Mudrex, observed that gold is trading above USD 4,150 per ounce after briefly crossing USD 4,200 on Friday. This was supported by a weak US jobs report, which reduced expectations of an October rate hike by the Federal Reserve to below 20%. However, investors still see a nearly 70% chance of a December hike.
Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, highlighted that elevated US Treasury yields, around 5.2%, are constraining gold's recovery. He noted that gold is caught between cooling labor conditions and persistent yield and dollar pressures. Analysts are also watching key economic data, including Services PMI figures and US trade data, for further guidance on precious metals.